YANGON -- Myanmar should respond to a crisis over its Muslim Rohingya community in a "calibrated" way without excessive force, a panel led by former U.N. chief Kofi Annan said on Thursday, adding that radicalization was a danger if problems were not addressed.

The treatment of approximately 1.1 million Rohingya has emerged as majority Buddhist Myanmar's most contentious human rights issue as it makes a transition from decades of harsh military rule.

Annan's commission - appointed last year by leader Aung San Suu Kyi to come up with long-term solutions for the violence-riven, ethnically and religiously divided Rakhine state - said perpetrators of rights abuses should be held accountable.

Security deteriorated sharply in the western state on the border with Bangladesh last October when Rohingya militants killed nine policemen in attacks on border posts.

In response, the Myanmar military sent troops fanning out into Rohingya villages in an offensive beset by allegations of arson, killings and rape by the security forces which sent 87,000 Rohingya fleeing to Bangladesh.

The situation in the state deteriorated again this month when security forces began a new "clearance operation" with tension shifting to a township, Rathetaung, where Buddhist Rakhine and Rohingya communities live side-by-side.

"While Myanmar has every right to defend its own territory, a highly militarized response is unlikely to bring peace to the area," the nine-member commission said in its final report.

"Whatever action is taken, we should make sure that the population do not suffer and (that) they have access to support and necessary humanitarian needs they require," said Annan at a news conference in Yangon.

Annan added that he discussed the military operation in Rakhine's Mayu mountains with army chief Min Aung Hlaing, who told him that the risk of a negative impact on the civilian population was small due to the remoteness of the area.

Nevertheless, the commission said that a nuanced and comprehensive response was needed to "ensure that violence does not escalate and inter-communal tensions are kept under control", it said.

A journalist broadcasts on Facebook Live during chairman for Advisory Commission on Rakhine State Kofi Annan's news conference in Yangon, Myanmar August 24, 2017. RETUERS/Soe Zeya Tun

The commission warned that if human rights were not respected and "the population remain politically and economically marginalized – northern Rakhine State may provide fertile ground for radicalization, as local communities may become increasingly vulnerable to recruitment by extremists".

The Rohingya are denied citizenship and classified as illegal immigrants from Bangladesh, despite claiming roots in the region that go back centuries, with communities marginalized and occasionally subjected to communal violence.

Annan has visited Myanmar three times since his appointment, including two trips to Rakhine. On Thursday, he presented his findings to Suu Kyi and Min Aung Hlaing.

The United Nations said in a report in February security forces had instigated a campaign that "very likely" amounted to crimes against humanity and possibly ethnic cleansing.

That led to the establishment of a U.N. fact-finding mission a month later.

But Myanmar's domestic investigation team criticized the U.N. report this month and rejected allegations of abuses.

Myanmar declined to grant visas to experts appointed by the U.N. and instead the government said it would comply with recommendations by the Annan team.

But Annan's panel - which has a broad mandate to look into, among other things, economic development, education and healthcare - said it was "not mandated to investigate specific cases of alleged human rights violations".

It said that the government "should ensure – based on independent and impartial investigation – that perpetrators of serious human rights violations are held accountable".

The commission made a host of other recommendations, ranging from a faster and more transparent citizenship verification process to equal access to healthcare.